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October, 1987, Vol.
110, No.
10
Analyzing employers' costs
for wages, salaries, and benefits
Employee compensation in private industry cost employers $13.42 per hour worked in March 1987. Straight-time wages and salaries—73.2 percent of the costs—averaged $9.83, while benefit costs—the remaining 26.8 percent—averaged $3.60.
These costs are based on data from the Bureau of Labor Statistics Employment Cost Index (ECI) which measures quarterly changes in employer costs for employee compensation. The ECI is a fixed-weight Laspyres index that uses 1980 census employment counts as weights. Data collected for the ECI can be used to derive compensation cost levels at no additional burden on survey respondents, but current employment weights are required. The BLS Current Employment Statistics survey in combination with the ECI sample provide the current weights.
The ECI's establishment sample has been recently expanded, making it possible to produce estimates of compensation cost levels that are sufficiently reliable for analysis and publication. The Bureau plans to publish compensation cost estimates from the ECI sample annually, using March as the reference period. The estimates will be available in midsummer.
This article presents cost estimates for the components of compensation for private industry workers,1 by industry division and occupational group. In addition, relative errors associated with the estimates and costs as a percent of total compensation are shown. This article also discusses highlights of the compensation cost estimates, illustrates how the estimates were calculated, and briefly explains the standard errors associated with the estimates.
This excerpt is from an article published in the October 1987 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 For some individual benefits, the cost is not published. Individual benefits with costs less than 1 cent per hour worked, such as severance pay and supplemental unemployment benefits, are not provided, and life, health, and sickness and accident insurance are reported as one cost. The reason for combining insurance is that a large proportion of respondents (approximately 25 percent) report the cost of these benefits together.
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